Saratoga County Industrial Development Agency among New York state IDAs that have offered the most financial assistance, according to report

By CAITLIN MORRIS

Sunday, March 24, 2013

The Saratoga County Industrial Development Agency is near the top of the list of New York IDAs that doled out the most financial assistance from 2008 to 2011, according to a state Authorities Budget Office report.

In those four years, Saratoga County IDA granted a total of $69.3 million in exemptions, with $42 million of that coming out of state and local sales taxes. The county IDA had between 30 and 46 active projects on its books during that time.

Saratoga County IDA provides financial assistance to the private sector to stimulate capital investment and job creation in the county.

Saratoga County Senior Planner Michael Valentine said that in addition to GlobalFoundries, the county IDA convinced out-of-state companies like Ace Hardware and Target to settle in Saratoga County by offering exemptions.

Raymond F. Callanan, chairman of the county IDA, said it's important to level the playing field for companies that are making large investments in the community over an extended period of time.

"Our job is to create jobs and to protect jobs that are already here," he said. "The way you do that is to offer the incentives that we're authorized by law to do."

IDAs can grant payment in lieu of taxes agreements and mortgage and sales tax exemptions.

In releasing the state Authorities Budget Office report, Director David Kidera wrote, "Economic development officials see these tax exemptions as effective and essential for spurring economic development." If the power of IDAs was restricted, he continued, it would be harmful to job creation and economic development.

However, there is some risk involved.

"At the same time, local governments and the state, which are asked to forego potential revenue, and taxpayers, who often bear the burden of these tax exemptions, expect that assisted projects deliver the new jobs and sustained economic benefits they promise," Kidera wrote.

Saratoga Economic Development Corp. President Dennis A. Brobston said the Authorities Budget Office failed to report the growth IDAs have promoted.

"They don't give you the benefits on the other end," he said, citing job creation and payroll tax figures.

Valentine agreed, calling the survey "one-sided" because it only takes into account the investment, not the reward.

GlobalFoundries spokes-man Travis Bullard said sales tax exemptions were critical in bringing the microchip manufacturer to the area.

"We compete in a global industry and our competitors get the same types of incentives where they operate," he said. "So for us to be competitive, these types of sales tax exemptions are critically important for our business."

Debate is growing regarding new state oversight of industrial development agencies, changes that are outlined in Gov. Andrew Cuomo's 2013-14 executive budget plan.

The segment of the budget titled "Loophole Closing Actions" calls for reforming the way local IDAs offer state sales tax exemptions by having regional economic development councils oversee them.

Statewide, industrial development agencies offered more than $5.6 billion in total financial assistance from 2008 to 2011, and $3 billion of that went to IDA projects outside of New York City. The net value of payments made by projects in lieu of taxes totaled almost $2.2 billion, $1.6 billion outside of New York City. The net exemptions from potential school taxes totaled $757 million. Sales tax exemptions totaled $276 million.

Kidera acknowledged in the report's release that the accountability and transparency of IDAs have improved, but he said, "We have not focused on whether this financial assistance equation is working for every community."

He said he hopes the release of data will lead to a discussion between public officials and taxpayers.

The complete breakdown of financial assistance provided by IDAs can be downloaded from www.abo.ny.gov.